LCR14859

Subject:
Claim for: (a) Implementation of (i) the third phase of the Programme for Economic and Social Progress (PESP) (ii) the first phase of the Programme for Competitiveness and Work (PCW) (iii) Clause 3 of the (PESP) (b) Restoration of other conditions of employment.

Recommendation:
The Court, having considered the issues raised by the parties in
their oral and written submissions, makes the following
Recommendation:-

1. That the first phase of the PCW be implemented with effect
from the 1st January, 1995;

2. That it is not unreasonable for the employees to expect that
the minimum terms of national wage programmes will be
implemented. However, given the serious financial
constraints being experienced in this case, the Court
recommends that payment of the third phase of PESP should be
the subject of review at the end of 1995 when all of the
circumstances can be taken into account and the parties will
best be in a position to see if the issue can be addressed;

3. The Court would ask the parties to give consideration to
examining the production methods with a view to putting in
place measures which will improve the efficiency and cost
effectiveness of production whilst at the same time
benefiting the employees.

Division: Mr McGrath Mr Pierce Mr Walsh

Text of Document__________________________________________________________________

CD95385 RECOMMENDATION NO. LCR14859

INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990

PARTIES:
DONEGAL RUBBER LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)

AND

SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION


SUBJECT:

1. Claim for: (a) Implementation of

(i) the third phase of the Programme for
Economic and Social Progress (PESP)
(ii) the first phase of the Programme for
Competitiveness and Work (PCW)
(iii) Clause 3 of the (PESP)

(b) Restoration of other conditions of employment.



BACKGROUND:

2. The Company is located at Ballyshannon, Co. Donegal, since
1982 and manufactures rubber components for supply to the
European car industry. The plant employs 230 workers. In
October, 1993, agreement was reached between the parties on a
cost-saving programme, which provided that:

"All rates of pay would remain frozen until 1st January,
1995, during which period no claims of a cost increasing
nature would be served, following which the Company and
SIPTU would meet to review the pay position. The Union
reserved the right to seek a review of other elements of
the package later in 1995; however this does not imply
any commitment on the part of the Company".




Other elements of the package included:

A 2% increase in production targets to 92%;

a revised break structure for shiftwork giving a saving
of 50 minutes for weekday shifts and 10 minutes for
weekend shifts;

elimination of sick pay;

a 3 day reduction in annual leave (from 21 days), pro
rata for weekend workers and external finishers.

In early 1995, the Union approached the Company regarding
implementation of the 3rd phase of the PESP (from 1st July,
1993), the 1st phase of the PCW (from 1st July, 1994), clause
3 of the PESP (to be negotiated) and the restoration of other
conditions. The Company responded that it was in a
loss-making situation and that the cost-saving measures were
required on an ongoing basis. The Company proposed a
package, as follows:-

"The PCW would be implemented from date of acceptance of
the proposals.

The `no cost-increasing claims' provision of the PCW
would be observed to include any aspirations for the
restoration of conditions withdrawn by agreement in
1993.

In the event that SIPTU would wish to pursue PESP Year 3
this would not occur (i) until after the expiry of the
PCW in the Company and (ii) until the Company had
retained a profit for 12 successive months. This was
without prejudice to the Company's response to such
circumstances.

There would be no claim made on the Company in respect
of PESP Clause 3."

The Company's proposals were not acceptable to the Union.
The dispute was the subject of a conciliation conference
under the auspices of the Labour Relations Commission, at
which agreement was not reached. The dispute was referred to
the Labour Court on the 29th of June, 1995 in accordance with
Section 26(1) of the Industrial Relations Act, 1990. The
Court carried out its investigation on the 25th July, 1995.




UNION'S ARGUMENTS:

3. 1. The workers have not had a wage increase since July,
1992. In spite of this, the workers have shown
commitment and loyalty to the Company.

2. Productivity has increased considerably and waste has
been reduced in the period since 1992.

3. Rates of pay at the Company are out of line with the
other large employer in the area.

4. Over the past 2 years, the workforce has given the
Company the required breathing space. The Company
should now recognise the contribution made by the
workers, by applying the increases sought, and also by
restoring the other benefits.



COMPANY'S ARGUMENTS:

4. 1. At the time of the October, 1993 agreement, the PESP
year 3 would otherwise have been due on 1st July, 1993.
The `pay freeze' provision of the October, 1993
agreement makes it clear that all rates of pay would
remain frozen until 1st January, 1995 which was to be
followed by a `review' of the pay position. This
effectively moved the anniversary date from July to
January. The commitment to a review means nothing more
than that, and does not imply as is suggested by the
Union, that, once January, 1995 was reached, all the
items of the October, 1993 package and all pay-increases
in the interim should be re-instated.

2. The Company's accounts (details supplied to the Court)
confirm that for year ending 31st December, 1994 trading
losses of some #254,912 were recorded resulting in a
continuing cumulative loss figure of #1.53m. These
figures take account of the contribution made by the
October, 1993 agreement. The cost of the Union's claim,
if implemented, is estimated at approximately #305,000
(details supplied).

3. The sales position of the Company is under considerable
pressure. A key factor is the increasing importance of
price competitiveness of goods produced here compared to
eastern European locations, which in terms of
distribution costs are more competitive given their
proximity to the market.



RECOMMENDATION:

The Court, having considered the issues raised by the parties in
their oral and written submissions, makes the following
Recommendation:-

1. That the first phase of the PCW be implemented with effect
from the 1st January, 1995;

2. That it is not unreasonable for the employees to expect that
the minimum terms of national wage programmes will be
implemented. However, given the serious financial
constraints being experienced in this case, the Court
recommends that payment of the third phase of PESP should be
the subject of review at the end of 1995 when all of the
circumstances can be taken into account and the parties will
best be in a position to see if the issue can be addressed;

3. The Court would ask the parties to give consideration to
examining the production methods with a view to putting in
place measures which will improve the efficiency and cost
effectiveness of production whilst at the same time
benefiting the employees.
~

Signed on behalf of the Labour Court


8th August, 1995 Tom McGrath
M.K./D.T. ---------------
Deputy Chairman

Note
Enquiries concerning this Recommendation should be addressed to
Mr. Michael Keegan, Court Secretary.